Better Capital Access for Enterprises

Specifically, the banking system has concentrated on mobilising capital, expanded credit granting along with improving credit quality and implemented policies on credit of the State and local authorities; actively balanced the capital to giving loans for subjects of agriculture and rural areas, export, small and medium sized enterprises with large number of employees. The system has also dynamically handled with bad debts in compliance with the Government’s project and plan of People’s Council, including assessing quality and recovery capability of debts and elaborating appropriate solutions. As of 31st December 2013, the system mobilized VND15,727 billion, up 15.38 percent over the end of 2012; granted loans of VND18,475 billion, up 21 percent over the end of 2012; bad debts made up 1.45 percent of total loans.

 

Moreover, the provincial banking system has adjusted credit interest rates to proper levels, saved costs to reduce interest rates, restructured loan due time for 1,382 customers of VND1,618 billion; reduced interest rates of earlier loans to current interest rates for 17,714 customers, equivalent to VND5,697 billion; exempted, reduced interests based on financial capability of credit institutions for 12 customers with VND391 million; not required interests for over due loans, prioritized collecting principals first, then interests for customers in financial difficulties; considered over granting new loans for profitable enterprises...

 

Mr Bui Xuan Chinh, Director of Binh Thuan Branch of SBV said that on contrary with over-abundant capital of commercial banks nationwide, commercial banks’ branches in Binh Thuan provinces are in lack of capital. Currently, they have mobilised only VND16,791 billion, less than demand for capital in the area; branches have to mobilize from the SBV to grant loans. Meanwhile, loans to 1,197 enterprises have reached VND5,362 billion, up VND435 billion over the end of 2013, which has proved an increasing capital absorption in the area and that many enterprises with real capital demand have an access to bank loans.

 

However, according to Mr Chinh, part of enterprises cannot obtain bank loans due to high bad debts, lack of collaterals, small order number, ineffective operations. The banking system has applied many methods to dissolve difficulties for enterprises. Specifically, in 2013, the system has adjusted interest rates 3 times from 12 percent per year to 9 percent per year; at the middle March 2014 continued reducing to 8 percent per year. It has reduced interest rates for earlier loans contracts to current ones for 638 enterprises with VND2,190 billion; exempted, reduced interests for 3 enterprises in financial difficulties due to asset losses, equivalent to VND333 million; restructurised loan due time, improved capacity of capital access for 76 enterprises with VND990 billion.

 

Moreover, to secure capital for preferential subjects in compliance with policies of the Government, direction of the SBV, credit institutions in the area have effectively realised investment projects with mechanism and interest rates suitable with each of subjects like: loans for investment and export according to Decree no 75/2011/NĐ-CP dated on 30th August 2011 of the Government; prioritized fields like: agriculture and agricultural area, export, small and medium sized enterprises, supporting industries; loans for developing agriculture and agricultural area according to Decree no 41/2010/NĐ-CP of the Government; loans for reducing losses after harvesting according to Decision no 68/2013/QĐ-TTg dated on 14th November 2013; loans for social housing. At the same time, commercial banks in the area review, adjust contracts to current interest rates, implement solutions to dissolve difficulties for enterprises in order to ensure capital for preferential subjects in compliance with Government’s policies.